What happened
Shares of Ralph Lauren (RL 0.43%) are down again today as investors an analysts grapple with the potential implications of a virus pandemic reaching the United States.
As of 1:46 p.m. EDT, Ralph Lauren's shares were down 8% from Tuesday's closing price.
So what
To some extent, investors have seen this coming. Ralph Lauren warned in February that it expected virus-related disruptions and store closings in Asia to cost it $55 million to $70 million in revenue in the quarter that will end on March 31.
Image source: Ralph Lauren.
But now, investors who have been watching the epidemics unfold in places like China, South Korea, and Italy are trying to grasp the implications of a similar scenario in the United States, which now seems likely.
Those implications aren't trivial. Ralph Lauren has over 200 stores in North America that could be forced to close for a period of time, and its products are sold through hundreds of other retailers' locations. Any scenario that keeps Americans home, depressing retail foot traffic -- or that shuts down stores altogether for a time -- will likely hit the company's top and bottom lines hard.
Now what
Ralph Lauren has promised to update its guidance when it reports its fiscal fourth-quarter and full-year results, in May. But it's looking increasingly likely that the pandemic could have significant effects on the company's business in the United States before then.
